Pound Falls Against Euro as Traders Reduce Bets on Interest-Rate Increases

(Bloomberg) -- The pound declined against the euro as
investors cut expectations the Bank of England will raise
interest rates this year for a sixth time.

Traders are betting on one more rate increase on signs
borrowing costs at a six-year high are beginning to slow the
economy. The European Central Bank, by contrast, will raise rates
at least twice more, futures trading shows. Economists predict
U.K. industrial production almost stalled in June, adding to
signs the economy may be losing momentum.


Read more at Bloomberg Currencies News

European Government Bonds Post Weekly Decline as ECB Signals Rates to Rise

(Bloomberg) -- European government bonds posted their
first weekly decline in a month after the European Central Bank
indicated it will raise interest rates further this year.

The decline in German bunds, Europe's benchmark, pushed 10-
year yields to the highest in a week yesterday after ECB
President Jean-Claude Trichet signaled rates may rise from a six-
year high of 4 percent as early as September. Fellow policy maker
Lorenzo Bini Smaghi told Italian newspaper Il Sole-24 Ore that
inflation would quicken this year, adding to the case for higher
borrowing costs.


Read more at Bloomberg Bonds News